BA, Amadeus Nearing Agreement

British Airways is very close to completing the last of its new round of deals with the major global distribution systems in the shape of an agreement with Amadeus, Business Travel News has learned. Though details have not been released, sources said that, like the other GDSs, Amadeus likely would offer British and Irish travel agencies an opt-in program providing full BA content in return for a charge per ticket. If an agency chooses not to accept the opt-in arrangement, it instead will face surcharges from the airline.

The three main rivals of Amadeus—Galileo, Sabre and Worldspan—all signed deals in recent weeks with BA, in which they charge agencies that opt in $1 per segment for most fare types other than nonrefundable fares, which incur a $2 per-segment charge. Agencies not opting in have to pay $6 per segment, which is also the amount of the surcharge BA currently levies on Amadeus subscribers. However, Amadeus has committed to reimburse agencies for this amount in full until May 1.

Explaining why Amadeus has taken longer to thrash out an agreement with BA, a spokeswoman said: "Negotiations are different from our competitors because our geographical spread is very different."

Although Amadeus has a worldwide marketshare of 30 percent of segments booked, its share in Europe is 55 percent. Unlike the United States, the European market continues to be regulated. This means that, like the other GDSs, many of the terms to which Amadeus agrees with BA would have to be made available to other airlines and markets in Europe. As a further complication, Amadeus is considerably weaker in the United Kingdom than in most European countries and therefore it has to ensure that the model to which it agrees for one of its smaller markets does not cause it problems in the territories that produce its largest revenues, such as Germany, France and Scandinavia.